Franchise
What is a franchise
A contractual arrangement whereby one party allows another party to use its trademarks and other intellectual property, as well as certain business processes and systems.
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What is a sole proprietorship
An unincorporated business that one person owns and manages.
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What is a corporation
A legal entity created by individuals, stockholders, or shareholders, with the purpose of operating for profit.
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What is a partnership
An unincorporated business structure that two or more parties form and own together.
What is a limited liability company
A business structure for private companies in the United States, one that combines aspects of partnerships and corporations.
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What are the two main titles for a franchise.
Franchisor and a Franchisee
Is this type of business easy or harder to start up
It is the easiest and the cheapest to start.
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What are the three main types of corporation
- C Corporation
- S Corporation
- Non-Profit Corporation
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What are some things that partners can constribute
Capital, labor, skills, and experience.
What are advantages of an LLC
Flexibility, Protection.
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What is the role of a franchisor
The franchisor is required to provide business support to the franchisee by providing training, equipment, and knowledge to the staff employed in the business.
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Why can a sole proprietor enjoy more of a profit often times over a franchise
Because it does not have to pay any royaltie fees to the business and can take in all the profit.
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A corporation that elects to pass corporate income, losses, deductions, and credits through to their shareholders for federal tax purposes.
What are the two types of partners?
General and Limited partners.
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What are disadvantages of an LLC
Fees and Taxes, regulations.
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What is the franchisee's role
The franchisee is required to uphold the business model set up by the franchisor and maintain consistency in the state of operations in all business locations under the brand name.
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What are some positives of being a sole proprietor
Easy and cheap to start up, Few government rules to follow, complete management control, Flow through of business profit.
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Name an advantage of the Corporation
A separate legal entity, Unlimited life, Limited liability, easy transfer of ownership shares, competent management, source of capital.
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Two or more people engaged in a business for the purpose of joint profit.
What does Flexibility mean for a LLC
They can choose to adopt the tax regime of sole proprietorships, partnerships, S corporations, or C corporations.
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Name a disadvantage of Franchising
Relatively heavy start-up-costs, royalties, lack of creativity since you have to follow existing rules.
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What are some disadvantages of a sole proprietor
Unlimited legal liability, limited to available capital, backup and succession, skills and experience can be limited.
Disadvantages of Corporation
Incorporation costs, Double taxation, and Documentation.
What is a Limited Partner
Has no right to manage the business or to act as its agent, but does have the right to vote on several important matters.
How many members can an LLC have?
An LLC can have an unlimited amount of members unlike and S-corp.
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